Date: December 1, 2015
From: UBC Human Resources and CUPE 116
To: CUPE 116 Employees who are Enrolled in the Disability Benefit Plan (DBP)
Subject: 2016 DBP Premium Rate Change
The long term disability plan for eligible CUPE 116 members is called the Disability Benefit Plan (DBP). This is a mandatory, employee-paid plan that provides a monthly income, after a six month waiting period, for those who meet the definition of total disability under the plan. The DBP is administered by Sun Life, with oversight from your union (CUPE 116) and UBC through the CUPE 116 Governance Committee. Premiums for the DBP are deducted from each eligible CUPE 116 member’s pay cheque.
The premium rate is reconsidered every January 1st and a new rate is proposed by the Insurer (Sun Life). The premium rate proposed by Sun Life is then reviewed on CUPE 116 members’ behalf by the benefits consulting firm, Mercer. Taking into consideration the number of claims during the relevant period, membership demographic data, and potential future claims, Mercer either renegotiates or recommends acceptance of the DBP rate proposed by Sun Life. A governance committee, which includes members of CUPE 116 and the University, reviews and if appropriate, approves the final rate that is recommended by Mercer.
As a result of the most recent review, the 2016 DBP premium rate will be 1.474% of earnings – which is lower than the 2015 rate of 1.915%. For monthly employees the new premium rate will be reflected on January 15, 2016 pay cheques. For hourly employees, the new premium rate will be reflected on the January 23, 2016 pay cheque.
CUPE 116 members have experienced reduced DBP premium rates over the last few years as follows:
- 2010: 2.3%
- 2011: 2.3%
- 2012: 2.3%
- 2013: 2.070%
- 2014: 2.070%
- 2015: 1.914%
- 2016: 1.474%
In 2014, the definition of “total disability” was changed under the plan to cover members until they can return to their “own occupation” rather than covering members only until they can return to “any occupation”. This is the case for the first two years of a claim, after which the plan reverts to “any occupation”. This improvement provides CUPE 116 members with the same quality of coverage as all other employee groups at UBC and so more applications for benefits under the plan will likely be approved. Consequently, Mercer has advised the governance committee that there will very likely be rate increases over the next three to five years. DBP premium deductions may ultimately revert back to rates similar to those paid in previous years.
The CUPE 116 DBP Governance Committee will continue to regularly review the disability plan to ensure that it meets the needs of CUPE 116 plan members, and that premium rates remain fair and financially competitive.
For Additional Information
For more information about the CUPE 116 DBP, please visit the following web page: http://www.hr.ubc.ca/benefits/irp-dbp/cupe-116/.
If you have any questions, please contact Stephanie Mah at 604-822-6823 or firstname.lastname@example.org.